Japan is a leader in pharmaceuticals and has three companies working overtime to develop treatments for Covid-19.

Fujifilm Holdings (FUJIF) bucked Monday's downward trend in Asia, posting a 6.0% gain for the day. That was in stark contrast to the Topix index of all major shares in Tokyo, which was showing a 4.6% loss in mid-morning trade, although it recovered late in the day to close 1.6% down.

Monday's gains for Fujifilm came after Japanese Prime Minister Shinzo Abe said on Saturday that his government plans to approve Fujifilm's drug Avigan as a treatment for the Covid-19 virus.

Fujifilm is a drugmaker better known for its cameras and film. But it has seen its share price spike 21.8% in the five days after March 13, fall back 11.1%, then rally another 14.3% in the last week on the backs of anticipation about Avigan.

Abe's comment came as part of a live televised speech in which he stopped short of declaring a state of emergency in Japan. But the prime minister promised the "boldest-ever package" of stimulus for the world's third-largest economy, with a supplementary budget due to be submitted to parliament within 10 days.

I explained 10 days ago how Avigan trials are under way in both Japan and China. Avigan is no wonder drug -- it appears to hasten recovery in mild-to-moderate cases of the Covid-19 disease but appears not to have much effect in the most-serious cases, where the virus has already multiplied.

In one test performed in Shenzhen in southern China, recovery time sped up to four days, from 11 days in regular cases. X-rays showed better lung condition, too. In another test in Wuhan, the drug cut the time of a patient's fever to 2.5 days, from 4.2 days.

No cure, no silver bullet, but better than nothing. It's being tested in Japan in institutions such as Fujita Hospital in Aichi Prefecture. The Japanese government has asked Fujifilm to study how to step up production of the drug.

The Japanese drug-discovery company AnGes has also got a share-price boost in recent days. AnGes said last Tuesday that it and its partner Osaka University have completed development of a DNA vaccine against the Wuhan virus, and plans to start testing the vaccine in animals soon. AnGes is an offshoot of Osaka University.

AnGes shares (4563.T) shot up as much as 17% on March 24, as it announced its progress with tentative completion of a vaccine. While its shares fell 2.1% on Monday, they are up 80.4% since Feb. 28, when its potential cure first came to public attention.

Most immunologists say it takes 12 to 18 months to run the necessary clinical trials before the introduction of a vaccine. Even if a vaccine works in a petri dish, it's vital to establish a) that it works in humans b) what level of the vaccine is safe and appropriate and c) that it does not have negative unintended consequences on health.

Vaccine-company investments are far more of a long shot than companies with existing, approved drugs that are being repurposed. Typically, a drug discovery company is pretty happy with a success rate of around one in 50 drugs it attempts to develop.

There are some 50 vaccines in the works for Covid-19 around the world, according to Credit Suisse. Using that logic, one of these vaccines just might work. Indeed, Johnson & Johnson (JNJ) has announced it has a lead coronavirus vaccine candidate.

Avigan is a therapeutic, in other words a treatment for disease symptoms, not a cure for that disease. But it's a drug we know works on influenza viruses. It makes sense it might work on another coronavirus.

The Fujifilm drug was approved in Japan in 2014 but is only permitted to treat new strains of flu, ones that couldn't be treated with existing drugs. That's because Avigan, Fujifilm's brand name for its drug Favipiravir, showed some negative effects on fetal development in animal tests.

So, the Japanese government has been the only customer for the drug so far. According to Nomura the government has a stockpile of 2 million pills, which it would normally use in around six months. But of course, demand would surge massively if Avigan is proven as a successful Covid-19 treatment and gets approval for use outside Japan.

South Korea has been considering importing Avigan. The drug is made by a wholly owned subsidiary, Fujifilm Toyama Chemical, in Japan. It is also already approved as a flu medicine in China, where it is made under license by Shanghai-listed Zhejiang Hisun Pharmaceutical (SH:600267).

Fujifilm typically resists commenting on Avigan, given its past testing history. It has been leaving discussion of the quasi-approved drug to the government.

The U.S. National Institutes of Health are running the first U.S. clinical trial for a Covid-19 drug with remdesivir, a drug made by Gilead Sciences (GILD) . Remdesivir showed promise in animal studies for treating SARS and MERS, and is also now being tested in China for Covid-19.

Both remdesivir and Fujifilm's favipiravir act in similar ways. Avigan enters cells infected by a virus and hinders the ability of the virus to proliferate, by inhibiting RNA polymerase, an enzyme that a virus such as influenza uses to replicate. Remdesivir failed in treating ebola, a far deadlier virus, while favipiravir showed a very modest effect in a test of 126 patients. Neither drug was taken further than small-scale testing for treating ebola.

Although the Gilead Sciences drug appears more powerful than Avigan, according to the brokerage Piper Sandler, the Gilead drug has also not been approved as a treatment for anything yet. Avigan is at least already approved to combat flu.

We should get better information on how the testing for both the Fujifilm and Gilead Sciences drugs are going in April. The Roche (RHHBF) rheumatoid arthritis drug Actemra has also shown good results in Chinese hospitals in treating patients with Covid-19, with its use already listed in Chinese Covid-19 treatment guidelines. Roche is continuing final-stage testing of the drug on this virus.

Takeda Pharmaceutical (TAK) , Japan's biggest pharmaceuticals company by sales, is working on its own plasma-derived therapy for Covid-19.

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